 Licensing & Renewals > Mortgage Brokerage > Opening a Brokerage > Trust Account
Pursuant to section 106 of the Real Estate Act Rules, when a mortgage brokerage in the course of its business receives funds on behalf of clients or investors it shall open and maintain at least one trust or pooled trust account in Alberta for the deposit of those funds. If a mortgage brokerage does not receive funds on behalf of clients or investors, it is not required to open and/or maintain at least one trust or pooled trust account.
The Real Estate Act, section 25(1), specifies a mortgage brokerage that operates a trust account shall keep complete and accurate financial records in which the mortgage brokerage must maintain a separate record for each person on whose behalf the mortgage broker is acting of all:
- money received in trust, accounts, books, returns, statements, reports, financial documents or other memoranda of financial or non-financial information, whether in writing or in electronic form or represented or reproduced by other means, and
- money held in trust,
- interest earned on money held in trust, and,
- disbursements made from money received or held in trust.
Additionally, the Real Estate Act Rules require that trust account cheques indicate on them that they are for a trust account.
Where a mortgage brokerage maintains a trust account, and the account is credited with interest, section 69 of the Real Estate Act will apply. Section 69 requires that when an industry member opens and maintains a trust account under section 25 of the Act, and that account earns interest, the industry member is to instruct the account institution to pay the interest credited to the Alberta Real Estate Foundation. In order to initiate this process, brokerages should contact the Alberta Real Estate Foundation directly. This requirement does not apply to money deposited in a separate trust account for a party for a deal in mortgage.
Trust account information must be provided to the Real Estate Council of Alberta, and brokers are responsible for ensuring the trust account information on file with RECA is accurate and up-to-date.
All trust accounts opened and maintained by the brokerage require supporting documentation in the form of a letter from the financial institution where the accounts are held.
The letter must include:
- The address of the financial institution in Alberta;
- The transit, institution and trust account number(s) of the financial institution;
- Financial institution stamp and signature of official; and,
- Confirmation from the financial institution that the entity making application for registration is the account holder.
Brokerages can view their trust account information to ensure it is complete and accurate using RECA Online, and they can make changes themselves using RECA Online. Brokers do not have to fax, mail or email trust account changes to RECA. RECA is automatically notified anytime RECA Online is used to make changes to trust account information. |
